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For instance, the 2. The proposals are not as definite as they might be.

that "British term British

suppose seems to be used in four different senses. traders means traders in British territory. In the former part of (b) "British means, I suppose, companies incorporated under the law of some part of His Majesty's dominions. In the latter part of (b) and in (c) "British companies" must mean companies in the constitution of which there is some security against The term alien control. The nature and extent of this security is not defined. cannot mean companies incorporated in British territory, because companies incor- porated abroad might then be able to evade the law by forming subsidiary companies. "British agents" must include (a) British subjects, (b) firms of some undefined degree of British subject composition, and (c) companies in the composition of which there is some undefined degree of British subject control. The term "foreign companies" is also ambiguous, as it is not clear whether the reference is to the place of incorporation or to the fact of alien control. 'Properly appointed auditors' is also rather vague. It is not clear whether any of the proposals refer to life insurance.

23

3. Attempts to define the conditions of non-alien control can be found in the following enactments :-

4.

(a) The China (Companies) Order in Council, 1915 (see the 1915 volume

of Orders in Council, page 183).

(b) The British Ships (Transfer Restriction) Act, 1916, 6 and 7 George,

5th chapter, 42.

(c) The Nigerian draft Ordinance.

The Straits Settlements Alien Enemies Winding up Ordinance, 1917,

Ordinance No. 6 of 1917.

Two questions suggest themselves. One is whether Hong Kong should adopt the proposed policy without regard to other parts of the Empire. The other is whether Hong Kong should recommend the policy for the Empire and should be prepared to adhere to it if adopted in other parts of the Empire.

The

5. Hong Kong seems too small to adopt the policy alone, though the volume of insurance business here may be very large for the size of the Colony. For one thing, it might drive a good deal of marine insurance business elsewhere. Pro- posal (c) would probably be outside the power of local legislation to effect. objection to the proposals as an Imperial policy apply also to the special case of Hong Kong. In the case of marine insurance there is also the special objection that it might lead to exports of Chinese produce being insured at Canton.

6. Possible objections to the proposed policy as an Imperial policy are the following:

(a) It may be doubted whether protection would be the best policy, either

for the public or for the British companies.

(b) The policy has never been tried, so far as I know, and its effects are

unknown.

(c) Discrimination might lead to reprisals. The House of Lords Com- mittee were opposed to discrimination in the case of life insurance companies on that very ground.

(d) It is not clear what the object of the policy is. Insurance is not a "key industry." The policy may be dictated by a natural but temporary reaction of the events of the War.

7. Proposal (e) is ambiguous in the following respects :-

(a) What are "foreign" companies? If the term includes the local Chinese companies, it is a question how far it would be fair to insist on complete accounts in English. The subject has been considered.

(b) How are the auditors to be "properly appointed"?

(c) Is there to be a compulsory periodical audit, or are the books only te be open to audit on demand or on some special order by some authority?! 8. The above criticisms are not hostile, but more particularity seems desirable, and the object of the policy should be explained. When these points are ascer tained the subject could be reconsidered. In any case, I would suggest that the proposals should be forwarded to the Secretary of State for consideration of the experts in the United Kingdom rather than that they should be recommended

J. H KEMP,

Attorney-General.

26th April, 1917.

35030

No. 31.

BAHAMAS.

THE GOVERNOR to THE SECRETARY OF STATE. (Received 12th July, 1917.)

(Confidential.)

SIR,

Circular, 25th September, 1916. Circular, 24th October, 1916. Confidential circular, 20th January, 1917. Confidential circular, 5th April, 1917.

Government House, Bahamas, 18th June, 1917, WITH reference to your Circular despatches noted in the margin,* and their enclosures, relative to the commercial and industrial policy to be adopted after the War, I have the honour to inform you that copies of various documents on this subject, together with a copy of the "Recommen- dations of the Economic Conference of the Allies," were sent to the House of Assembly for careful consideration and for an expression of its views with regard to the policy indicated. I now enclose, for your information, a copy of a report of the Select Committee of the House to whom this matter was referred, from which it will be seen that the Committee consider, inter alia, that it is of primary importance to this Colony that it should be included in an all-red steamship connexion with the Mother Country

2. In connexion with your Confidential circular of the 5th April,† trans- mitting a copy of an Interim Report on the Treatment of Exports from the United Kingdom and British Overseas Possessions, etc., I would point out that the two principal exports from this Colony are sisal and sponge, and for the past five years the quantities and approximate values have been as shown on the attached return. 3. In the case of sisal the whole of the export at present goes to the United States, and, in the case of sponge, about twenty-five per cent. is consigned to the United Kingdom. In these circumstances, should it be proposed after the War to endeavour to deflect (a) a portion of the sisal export, or (b) a greater proportion of the export of sponge, to the United Kingdom, the matter will presumably be referred to the Committee, who, after careful consideration, will doubtless be able to advise as to how this can best be done.

I have, &c.,

W. L. ALLARDYCE,

Governor.

Enclosure 1 in No. 31.

REPORT OF THE SELECT COMMITTEE, ADOPTED BY THE HOUSE. REPORT of the Select Committee to whom was referred His Excellency the Governor's message, No. 18, with regard to the commercial and industrial policy to be adopted after the War.

Your Committee have ascertained that it is the opinion of the Chamber of Commerce that it is a point of primary importance to the Colony that it should be included in an all-red steamship connexion with the Mother Country, and that if this can be obtained the Chamber would then be in a position to make further recommendations in the matter.

Your Committee share this view, and feel that it is most essential that the Colony should be assured of a better system of steamship communication with the Mother Country.

It should be borne in mind that, since the recommendations of the Economic Conference of the Allies at Paris were made, the United States of America have entered the world conflict, and will no doubt be a party to the economic settlement and consequent policy after the War.

In these circumstances your Committee do not feel that it would be of any practical value to make any recommendations at the present time.

J. RONALD YOUNG. R. H. CURRY. CHAS. E. ALBURY, THADDEUS TOOTE. WILLIAM J. PINDER. L. G. BRICE

Committee Room,

House of Assembly,

10th May, 1917.

* No. 1, and 45879, 40053, and 9585: not printed.

L. WALTON YOUNG.

+ 9585: not printed.

H